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John Passant

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November 2008



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My interview Razor Sharp 18 February
Me interviewed by Sharon Firebrace on Razor Sharp on Tuesday 18 February. (0)

My interview Razor Sharp 11 February 2014
Me interviewed by Sharon Firebrace on Razor Sharp this morning. The Royal Commission, car industry and age of entitlement get a lot of the coverage. (0)

Razor Sharp 4 February 2014
Me on 4 February 2014 on Razor Sharp with Sharon Firebrace. (0)

Time for a House Un-Australian Activities Committee?
Tony Abbott thinks the Australian Broadcasting Corporation is Un-Australian. I am looking forward to his government setting up the House Un-Australian Activities Committee. (1)

Make Gina Rinehart work for her dole

Sick kids and paying upfront


Save Medicare

Demonstrate in defence of Medicare at Sydney Town Hall 1 pm Saturday 4 January (0)

Me on Razor Sharp this morning
Me interviewed by Sharon Firebrace this morning for Razor Sharp. It happens every Tuesday. (0)

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Who will carry the cost of capitalism’s crisis?

Australian capitalism is in trouble. And the bosses want workers to pay.

Ed Shann in a recent article (“Rug pulled from under us” Australian Financial Review November 13 page 79) argued that Australia would be severely affected by the global economic crisis.  He said that if the terms of trade fell by 10 per cent over 2009, Australian real domestic income per head would decline by over 2 per cent. He seems to think this will happen.  He ended up by saying:

Real incomes are about to fall sharply and claims that Australia is well placed to deal with the world recession are not preparing the community for the hard times ahead.

Who will carry the cost of capitalism’s crisis?  Shann assumes it is workers. Given the last 25 years of class quiescence and collaboration this assumption appears well founded.  Unions and workers will roll over and play dead as capital goes on the attack.  Or will they?

After almost three decades of union and political class collaboration, in which union membership and coverage are at historic lows, with the labour share of national income at its lowest for over forty years (despite 17 years of boom until recently) and with the destruction of rank and file control or influence over their own unions and a leadership married to the idea that what is good for capital is good for labour, the situation might appear bleak.  But there may be a lot of pent up anger among workers, unionised and non-unionised, crystallising around this economic crisis, and one spark (perhaps here, but even perhaps overseas) could light a fire that sweeps Australia.

Although real wages have been increasing in Australia over time, the wages share of national income has been falling. So much so that that wages share is now at its lowest for over 40 years. So even though Australia had until June this year been booming, the share of national income going to income has been falling.

The main reason for this is the class collaboration of the trade union leadership.  Since the Hawke Labor Government came to power in 1983 a number of things have occurred that have seen union membership collapse.

The most important of these was the Accord, a tripartite agreement between unions, Government and capital to ensure that real wages were kept under control. It has been spectacularly successful in doing this – so much so that, as I mentioned above, the wages share of national income is at almost historic lows.

A major plank of this arrangement saw the trade union officials given real influence and power in successive Labor Governments. This power and influence was based on the idea that what was good for capital was good for labour.  This is a more sophisticated version of the US trickle down theory which imposed its version through the direct agency of capital in the form of successive Republican and Democrat Governments.  In Australia the beauty (from the point of view of capital and Government) of the Accord was that it was the trade union officials who pushed the trickle down theory onto a sometimes reluctant workforce.

Thus when airline pilots went on strike for wage increases outside the framework of the Accord, the Government, business and the ACTU – the peak Australian trade union body – and various individual unions united to smash the strike.  Such was the threat to the officials’ position and the Accord  that these union leaders shamefully endorsed the Government’s use of the military to break the pilots.

Similarly another union with the possible strength and militancy to bust the Accord was the Maoist/Stalinist Builders Labourers Federation.  Other unions and Labor Governments federally and in the eastern states combined to destroy it through legislation, scabbing and police actions.

While the Howard Government’s election in 1996 saw them abandon the Accord, the trade union leadership continued its class collaboration, trading off hard won conditions in exchange for real wage increases,  And all the time capital’s share of national income went up and up. At the same time as labour’s share of national income went down, workers responded by increasing their levels of debt.  The end result of 25 years of class collaboration appears thus to have been lower real wages than could have been won, much higher personal debt levels among workers to make up for that,  and a weakened and confused union movement unprepared for the bosses’ onslaught about to be unleashed.

One major example of class struggle during the Howard years was the waterfront dispute. As the Government and employers fought to smash union “control” forever on the waterfront (including training scabs in Dubai and using dogs on strikers and supporters) workers and unions around Australia rallied to the defence of the waterside workers.

Yet the workers lost, precisely because the ACTU and other trade union leaders feared a mobilisation of members more than they feared defeat.  The battle became a legal one, and although the union movement won in the courts, they lost in the ports.  Casualisation is back, hurry-ups are now entrenched, union influence weakened, the workforce demoralised and stressed.

The concentration of power in the hands of the elected officials that the Accord began necessarily entailed the destruction of rank and file control or influence.   This has shut out workers from their own organisations.

The end result of 25 years of class collaboration has been a massive reduction in union membership.  Why be in a union if you can’t as members collectively control it and the leadership don’t fight for real wages increases and in defence of jobs and conditions?

Why talk about this? It is to put in context the likely response of the ACTU and most unions in the face of the greatest challenge to our economic well being since the Great Depression.

Let me go back to Ed Shann’s prediction that Australia’s real income will fall 2 per cent this year and my question about who will bear this fall – capital or labour?

Given the failure of the trade union leadership to challenge the decline of the wages share of national income, its entrenchment in the Labor Government, its class collaborationist approach, the low number of workers in unions and the destruction of rank and file control or influence over their own unions, the tea leaves all point to labour bearing the cost of this deep recession.

If we let them.  Now arguing in unions for large real wage increases to push the depression onto capital is going to be very difficult. For example suggesting a 30 hour week without loss of pay or jobs will be seen as madness by the bosses, the Government and most officials.  Rank and file workers might have a different view, although we need to be clear most workers today have no sense of history of struggle let alone having been involved in bitter strikes. So for a while ideas of militancy may be foreign and unfamiliar to them too.

Yet there is a real logic to it.  It is not workers who caused this deep recession.  It is the bosses and their crisis ridden system.  The very way capitalism is organised leads to economic meltdown.

Fear stalks the working class – fear of job losses, wage cuts, worsening conditions.  Fear is not an organising tool.

But the battle is not necessarily over.

Unions still have 2 million members in Australia.  Some have been winning real wage increases.  Teachers in Western Australia have just won 24 per cent over 3 years. Building workers in Victoria look like they have an extra 6 percent per year for the next few years.

If the big battalions of the Australian working class pushed for large wage increases and reduced working hours without loss of pay, they could make gains that begin the process of restoring labour’s share of national income to previous better levels.

That will not be easy, given the history I have outlined above and the fact that Workchoices Lite – the Rudd Labor Government is keeping about 90 per cent of John Howard’s odious Workchoices laws – is designed specifically to counteract unions and workers in bad economic times.

But times have been bad for unions before.  They have battled repression, depression, military intervention, scab unions on scales worse than today.  And they have won.

But there are two elements to those victories.  Militants with some idea of the way forward organised others to push for victories.  The Maritime Union for example ended casualisation in the 1930s by organising previously unorganised workers.  The unemployed workers’ union won pay increases during the Depression for suss workers through strikes. In 1969 rolling general strikes freed union official Clarrie O’Shea from jail and destroyed the penal powers In 2006 and 2007 millions mobilised against Howard’s new industrial laws.

Further it is possible there will be growth in Australia this year (although below the level to keep unemployment at bay.)

Finally the years of collaboration have seen some workers become angry without there being an outlet for that anger through their top down tightly controlled unions.

One spark anywhere (in Australia but also possibly elsewhere in the world) could light a fire of working class action across the country.



Comment from Jim
Time November 19, 2008 at 6:10 pm

While there is a lot of truth in what has been said in this article.
I think there is a greater change under way.
When this meltdown is over – nothing much will look the same.

Vast numbers of people will be retenched and computers etc will take any new jobs that arise.
We will be entering an age of leisure and most people will recieve a livable wage from the federal government, much as pensioners do.

A reasonable tax on our huge resources being sent overseas, and affordable housing ( cheap rent) will provide most people with a good standard of living.

Comment from Arjay
Time November 20, 2008 at 8:55 pm

The present financial system must be left to rot.The billions of dollars poured into the system now is just letting those at the apex of this scam take more money and run.The US Govt must sack the Federal Res and print their own greenbacks thus be able to raise their own capital.
!0 yrs ago we in Aust had a GDP of $600 billion,we now have a GDP of almost twice that,yet most ordinary folk feel worse off.We have no money for infrastructure and suffer from general social decay.
There is a better way rather than descending into rampant socialism.Make the rules of capitalism fairer.Put both Govt and the large corporates in their place.
We have fair rules for the World Game of football,but there are no rules for the game of economics.

Comment from al loomis
Time November 24, 2008 at 7:02 am

the left has never understood the need for democracy. this message from a time capsule is a perfect demonstration that this blindness continues.

Comment from Arjay
Time November 30, 2008 at 4:36 pm

Abraham Lincoln,”The privilege of creating and issueing money is not only the supreme perogative of govt,but is the Govts greatest creative opportunity.The people will be issued with a currency as safe as their own Govt.Money will cease to be the master and become the servant of humanity.Democracy will rise superior to money power.” A few weeks after this statement he was assassinated.J F.Kennedy likewise tried to print his own greenbacks and suffered a similar fate.
The “New World Order” should not be about the UN,Global Corporates,and the Central banks controlling the Planet.It should be about Democracy.The present financial debacle has evolved because of power in too few hands.Globalisation is all about giving power to the few and subjugating the masses.Communism has done likewise.
It is time for the masses be become aware and fight for what is rightfully theirs.

Comment from John
Time December 24, 2008 at 8:35 pm

al loomis

Thanks. I can understand why you call this a time capsule but I’m not quite sure why you say I’m blind to democracy.

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